Ministers are facing fierce opposition from medical groups, teaching unions and children's charities over plans to allow products to be used in television programmes for marketing purposes for the first time.

Critics claim the move, which broadcasters say will give them up to £140m a year in extra revenue, will fuel childhood obesity, exacerbate the problems caused by alcohol and gambling, and distort storylines by rewarding programme makers for deliberately giving certain items high visibility.

The British Medical Association has written to the Department for Culture, Media and Sport (DCMS) strongly opposing the plan. "The BMA is deeply concerned about the decision to allow any form of product placement in relation to alcohol, gambling and foods high in fat, sugar or salt (HFSS) as this will reduce the protection of young people from harmful marketing influences and adversely impact on public health," says its submission to a DCMS consultation in the issue, which closes on Friday.

"By its nature product placement allows marketing to be integrated into programmes, blurring the distinction between advertising and editorial, and is not always recognisable. Studies show that children are particularly susceptible to embedded brand messages and these operate at a subconscious level."

Their concern was echoed last night by Prof Steve Field, chairman of the Royal College of General Practitioners. He said: "As a consumer I'm worried that the quality of drama programmes will suffer because there may be a focus towards selling a product rather than developing a storyline. But as a doctor, I'm really worried that programmes could be selling alcohol and unhealthy foods, especially sweet foods and fatty foods targeted at children.

"We shouldn't give programme makers financial incentives to sell more of these products by having them featured in their shows and in so doing contribute to the epidemic of obesity and alcohol misuse."

Rules laid down by Ofcom, the broadcasting regulator, currently forbid product placement. Last March the government ruled out rescinding the ban, but then in a U-turn Ben Bradshaw, the culture secretary, announced plans to relax the rules in order to help commercial broadcasters weather the downturn in advertising. Campaigners have denounced the decision as a "sop to broadcasters and food companies".

Ofcom's code does not stop any British broadcast of shows made abroad, especially in America, which feature product placement, such as Carrie Bradshaw's Apple laptop in Sex and the City and Jack Bauer's Ford vehicles in 24.

Other influential organisations are opposing some or all of the plan, such as the National Union of Teachers, which represents 280,000 teachers in England and Wales; the consumer group Which?; the British Heart Foundation; National Children's Bureau; the National Heart Forum; and the Children's Food Campaign.

John Bangs, the NUT's head of education, said: "It's very sad that having previously resisted product placement the government has now done a U-turn. There are enough commercial pressures on children and young people without TV adding to that."

Children's programmes would remain no-go areas under Bradshaw's plan – which would see product placement begin this summer – as would the placement of tobacco products and prescription medicines. But Ofcom research shows that most children's viewing is of programmes made for adults, such as soaps and entertainment shows such as The X Factor.

Several cabinet ministers share at least some of the critics' concerns. Bradshaw's predecessor, Andy Burnham, now the health secretary, in June 2008 warned of a risk that product placement "exacerbates this decline in trust [in British television] and contaminates our programmes". It would be wrong to "elide the distinction between programmes and adverts".

Burnham added: "As a viewer, I don't want to feel the script has been written by the commercial marketing director. If Jim Royle gets out of his chair for a Kit Kat, I want to think, 'he fancies a Kit Kat' – not, 'Kit Kat my arse!' If I thought it was because someone has paid for him to eat one it would change the way I felt about the programme. I think there are some lines that we should not cross – one of which is that you can buy the space between the programmes on commercial channels, but not the space within them."

The children, schools and families secretary, Ed Balls, has told MPs that "on the particular issues of product placement, I think that we need to proceed with great care". The environment secretary, Hilary Benn, also has deep reservations.

At a recent briefing, DCMS civil servant Chris Bone explained that the government is "currently minded to permit" what he called "showcasing". He added: "As ministers have made clear, the government recognises that the advertising revenue of commercial TV companies is under pressure. There is competition from the internet and other new media, and there is also the general recession and downturn. The government wants to do what it can to help, provided that necessary viewer safeguards remain in place."

Labour MP Barry Sheerman, chairman of the Commons children, schools and families select committee, said there were "deep divisions" between government departments on the issue.

"It's a disgrace that in an age of child obesity that we are considering allowing product placement. It's obscene," Sheerman said. "The exemptions for children's telly do not reassure me – the idea that if you put it on later children won't see it is ridiculous. I can guarantee that if this is allowed it will end up with product placement on X Factor."